International Monetary Fund | IMF
International Monetary Fund
The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
IMF created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership.
Why the IMF was created and how it works:
The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
The IMF’s responsibilities: The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
- Membership: 189 countries
- Headquarters: Washington, D.C.
- Executive Board: 24 Directors each representing a single country or a group of countries.
- Staff: Approximately 2,700 from 148 countries
- Total quotas: US$668 billion (as of 9/13/16)
- Additional pledged or committed resources: US$ 668 billion
- Committed amounts under current lending arrangements (as of 9/8/16): US$159 billion, of which US$144 billion have not been drawn.
- Biggest borrowers (amounts outstanding as of 8/31/16): Portugal, Greece, Ukraine, Pakistan
- Biggest precautionary loans (amount agreed as of 9/8/16): Mexico, Poland, Colombia, Morocco
- Surveillance consultations: 130 consultations in 2013 and 132 in 2014, and 124 in 2015
- Capacity development: 274 person years in FY2013, 285 in FY2014, and 288 in FY2015
- Original aims:
- promote international monetary cooperation;
- facilitate the expansion and balanced growth of international trade;
- promote exchange stability;
- assist in the establishment of a multilateral system of payments; and
- make resources available (with adequate safeguards) to members experiencing balance of payments difficulties.
Work of IMF:
The IMF’s fundamental mission is to ensure the stability of the international monetary system. It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to members.
The IMF oversees the international monetary system and monitors the economic and financial policies of its 189 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
A core responsibility of the IMF is to provide loans to member countries experiencing actual or potential balance of payments problems. This financial assistance enables countries to rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while undertaking policies to correct underlying problems. Unlike development banks, the IMF does not lend for specific projects.
IMF capacity development—technical assistance and training—helps member countries design and implement economic policies that foster stability and growth by strengthening their institutional capacity and skills. The IMF seeks to build on synergies between technical assistance and training to maximize their effectiveness.
Organization & Finances:
The IMF has a management team and 17 departments that carry out its country, policy, analytical, and technical work. One department is charged with managing the IMF’s resources. This section also explains where the IMF gets its resources and how they are used.
The IMF has a Managing Director, who is head of the staff and Chairperson of the Executive Board. The Managing Director is appointed by the Executive Board for a renewable term of five years and is assisted by a First Deputy Managing Director and three Deputy Managing Directors.
The IMF’s employees come from all over the world; they are responsible to the IMF and not to the authorities of the countries of which they are citizens. The IMF staff is organized mainly into area; functional; and information, liaison, and support responsibilities.
Most resources for IMF loans are provided by member countries, primarily through their payment of quotas.
Quota subscriptions are a central component of the IMF’s financial resources. Each member country of the IMF is assigned a quota, based broadly on its relative position in the world economy.
Special Drawing Rights (SDR)
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
Gold remains an important asset in the reserve holdings of several countries, and the IMF is still one of the world’s largest official holders of gold.
While quota subscriptions of member countries are the IMF’s main source of financing, the Fund can supplement its quota resources through borrowing if it believes that they might fall short of members’ needs.
India and The IMF:
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